MOKFARRAH LTD

Executive Summary

MOKFARRAH LTD is a young, micro-entity operating in real estate, showing healthy short-term liquidity but very low equity relative to substantial long-term debt. The company is solvent but financially fragile, requiring focus on strengthening equity and managing debt to ensure sustainable growth and resilience. With prudent financial management, it can improve its financial health and withstand future challenges.

MOKFARRAH LTD - Analysis Report

Company Number: 14761953

Analysis Date: 2025-07-29 12:42 UTC

Financial Health Assessment for MOKFARRAH LTD

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1. Financial Health Score: C

Explanation:
MOKFARRAH LTD shows a foundational financial structure, but with some cautionary signs. The company has solid fixed assets and positive net current assets, indicating an ability to meet short-term obligations. However, the large long-term liabilities relative to low net assets suggest a thin equity buffer, reflecting moderate financial stress. Overall, the company is solvent but with limited financial resilience — hence a grade of C, indicating fair but vulnerable health.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	663,339	Strong investment in long-term assets, likely real estate given industry classification.
Current Assets	213,910	Available short-term resources including cash and receivables — a healthy liquidity base.
Current Liabilities	51,978	Debts due within one year, manageable relative to current assets.
Net Current Assets	161,932	Positive working capital, indicating the company can cover short-term debts comfortably.
Creditors > 1 Year	817,345	Significant long-term liabilities, likely loans or mortgages linked to property assets.
Net Assets (Equity)	5,526	Very low equity, signaling minimal financial cushion against risks or losses.
Shareholders’ Funds	5,526	Reflects the total equity capital invested by owners; here, minimal relative to liabilities.
Number of Employees	3	Small team, consistent with micro-entity status, low overheads likely.

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3. Diagnosis: Financial Condition

MOKFARRAH LTD’s financial “vital signs” reveal a company with a healthy core asset base, particularly in fixed assets consistent with its real estate business focus. The positive net current assets (working capital) are a good symptom of near-term liquidity health — the company is equipped to meet its short-term obligations without distress.

However, the large amount of long-term creditors (over £800k) relative to very modest net assets (£5.5k) is a symptom suggestive of financial strain or vulnerability. This thin equity “pulse” means the company has little buffer to absorb shocks such as asset devaluation, unexpected expenses, or downturns in rental income. The company’s solvency is currently intact but fragile, akin to a patient with a strong heart but low immunity.

The micro-entity status and exemption from audit reflect a small, early-stage operation with limited historical data, so financial trends are not yet established. The directors (all family members) appear closely involved, which may aid tight control but also concentrates risk.

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4. Recommendations: Path to Financial Wellness

• Strengthen Equity Base: Explore capital injections or retained earnings accumulation to build a stronger equity buffer. This will improve resilience against financial shocks.
• Manage Long-Term Debt: Review terms and conditions of the long-term creditors. Negotiate restructuring or refinancing where possible to reduce financial burden and improve net asset position.
• Enhance Cash Flow Management: Maintain vigilant monitoring of cash flows to preserve healthy working capital. Consider short-term financial planning tools to avoid liquidity stress.
• Strategic Asset Utilization: Given the significant fixed assets, ensure these are optimally generating income (e.g., rental yields), or consider partial disposal of non-core assets if needed to improve liquidity.
• Regular Financial Review: Implement quarterly financial health checks to detect early symptoms of distress and adjust plans proactively.
• Governance and Risk Controls: Given the concentrated director structure, consider independent advisory input to enhance decision-making and risk assessment.

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